A bond is issued for a named principal, but the resources supporting that principal may sit elsewhere in a group. The counter-indemnity is the agreement through which the insurer seeks recovery after meeting an obligation under the guarantee. Its parties need to match the financial analysis.
A current group chart helps identify trading subsidiaries, asset-owning entities and any holding company offered as an indemnifier. Accounts and existing security arrangements then show where assets and liabilities actually sit. Common ownership does not itself make one company liable for another’s obligations.
The legal review should address authority to sign, the obligations covered and enforceability in the relevant jurisdiction. A broker should not assume that a historic counter-indemnity covers a newly incorporated principal or an additional type of guarantee.
For an autumn pipeline review, resolving these points early can avoid repeated document changes for each certificate. A facility is more usable when the agreed recourse, financial information and issuance conditions are clear to everyone involved.
Where this goes next
